The numbers: ADP, a company that makes paychecks, said that U.S. businesses added 143,000 more jobs in September than they thought they would. Still, job gains were less than 200,000 for the sixth month in a row, which shows that the job market has slowed down a lot.
The Federal Reserve is now more worried about the job market than about inflation. The Federal Reserve cut interest rates two weeks ago because inflation was slowing. The bank promised to make more cuts to make sure the job market doesn’t get much worse.
In September, the ADP asked economists and found that they thought the economy would add 128,000 new jobs.
The drop in hiring has made it harder for workers to get better wages, which is one of the most important facts.
People who change jobs saw their annual pay rise slow from 7.3% in August to 6.6% in September. People who switched jobs a few years ago could get a pay raise of up to 16 percent. At that time, companies were trying to hire because of the worst labor shortage in modern times.
“Job stayers” got a 4.7% raise every year on average.
But the difference in pay between the two groups shrunk to 1.9%, which is one of the smallest amounts seen since ADP started keeping track of wages.
Nela Richardson, chief economist at ADP, said, “Last month, stronger hiring didn’t need stronger pay growth.”
Last month, most of the new jobs that were made were in building, leisure and hospitality, and health care.
It took 103,000 more jobs to be added in August than in July, but that was still the smallest gain in jobs in more than three and a half years.
The ADP report only looks at jobs in the private sector. The U.S. jobs report lists people who work for the government.
Economists think that the Bureau of Labor Statistics will report a 150,000 increase in jobs in September.
In general, the job market that was so hot a few years ago—when wages were going through the roof and workers had power over their bosses—is no longer there.
People are leaving at the lowest rate in 11 years if you don’t count the years of the pandemic. This is because jobs are harder to find.
It’s not likely that hiring will speed up much until the Federal Reserve lowers interest rates even more. This will help the economy grow.
As for the future, Chris Larkin, managing director of trading and investments at E*Trade, said, “Today’s ADP employment number surprised to the upside, just like yesterday’s job openings total. This suggests the labor market is bending but not breaking.”
“But the monthly jobs report on Friday will likely say everything we need to know about the job market in the coming months.”
